A Beginner’s Guide To Using Amazon FBM

If you’re a seller on Amazon, you might have familiarized yourself with Amazon FBA. Most sellers today are using Fulfillment by Amazon, which is also known as FBA. The sellers mostly prefer it because it is more convenient and hassle-free. It gives them more free time to manage their business, like focusing on exploring the internet to look for other trending products to sell. When you’re creating your seller account in Amazon Seller Central, you can choose which fulfillment you’re going to set up in your seller account, whether it’s FBA or FBM. You can also register for both fulfillment services in canada, which means your products will get more exposure and will increase your chances of selling your merchandise.

Some fewer sellers use FBM. But why use Fulfillment by Merchant if you can just use FBA service and let Amazon handle the rest?

If you have done enough research on how both fulfillment works, you’ll see that using FBM has plenty of advantages. But what is FBM anyway?

Fulfillment by Merchant (FBM)

Amazon FBM is a fulfillment where the seller is the one who manages the storage, picking, packing, shipping, and customer support. When a seller uses fulfillment by a merchant, he/she takes complete control of all the work instead of paying Amazon an additional service fee. 

How to Start Selling on Amazon?

• Selecting your marketplace- if you live in the US, it is much better to start selling in the US marketplace. You can also start selling in the US marketplace even if you live in another country because there is more traffic there than the global market.
• Selecting your business model is essential when you want to take your business to the next level or just maintain your small business. 
• Selecting your fulfillment method. Reading carefully and choosing which works for your business, especially if you are new to selling items on Amazon.  
• Create your Amazon Seller account- when making a business account, you should create a brand name for your products. You can visit Amazon Seller Central for more information about their requirements for you to start your small business with them. 
• Plan or create your listing- there are two ways of selling your items on Amazon. If the item you are currently selling exists in their online shop, you will have to go to the existing listing and click on the ‘Sell On Amazon.’ After that, you can insert the necessary information about the item you are selling. The 2nd way of selling your items in their online selling platform is when your product is one of the first to be put on the listing on Amazon. To do this, you are gonna have to log-in to Seller Central. Click ‘Inventory.’ Then add the product. After adding the said item, click ‘I add a product not sold on Amazon,’ and then you enter the details of the merchandise. 
• And last but not least, fulfilling your orders- if you are going to be choosing FBM, you will have to ensure that your clients will receive the items that they have ordered from your shop. 

When to Use FBM?

1. If you’re still a novice, it is ideal to start using FBM service for you to learn how to manage your business.
2. When you have a small business
3. The products you sell are heavy or bulky.
4. You have your courier and logistics. 
5. You have all the time you need to give all the information your customer needs.
6. And when you don’t want to pay additional service fees to save more and gain more profit. 
7. You have computed all the expenses that are needed to fulfill your orders. 
8. During holidays and shipping, items can be quite slow on FBA services, while FBM can continue to receive and ship orders. 
9. When there are emergencies such as COVID19, Amazon FBA changes its policy, and they only prioritize essential goods while FBM can continue selling other non-essential items. 

What are the Advantages of Using FBM?

1. No monthly storage fees
2. Margins are greater because the seller doesn’t need to pay for any additional fees to Amazon.
3. The seller has more freedom to run their business as they want
4. No unexpected cost; the seller will know beforehand if the services that they use to fulfill their orders have raised their service fee.
5. The seller has full control of his/her entire inventory.
6. It has less paperwork when dealing directly with the customers.
7. Sellers that use FBM do not need to worry about the sudden losses due to the constant changes with Amazon’s policy.
8. Seller will have more knowledge of how his/her business works, like getting to know your target customers by engaging with your customers to build brand loyalty.

Disadvantages of Using FBM

One of the disadvantages of using this fulfillment is time-consuming picking, packing, and shipping to do your fulfillment. If you do things on your own and you receive bulk orders from different customers, picking and packing them will take a lot of time, especially if you’re not used to packing a huge number of orders. You also have to constantly check your Amazon account to check if you have ordered from customers and inquiries from potential buyers. 

It’s best if you gave more time and days to managing your Amazon Seller account to grow your business. When there are issues with the shipping delays or product defects, you’ll be your customer service, and you’ll spend a bit more time fixing the problems and making sure that you retain your good reputation with your buyers to prevent losses. 

Sometimes using FBM is good because you can control the costs of services you use when fulfilling your orders. But that’s not always the case. There are times that the shipping fee increases depend on specific reasons like holidays. You have to be prepared to look for a new courier just in case there is a sudden increase with their service fee. 

You are your customer service. Unlike FBA, Amazon has a customer service department that handles all queries of your potential customers. 

A seller is not eligible for Amazon Prime when they are using fulfillment by a merchant. Meaning you can’t use an Amazon Prime badge on your chosen products among your listings. 

The advantage of having an Amazon Prime badge on your items is it increases your product’s visibility to other loyal Amazon Prime members. You’re at a disadvantage unless you are qualified for Seller Fulfilled Prime. 

Difference Between FBM and SFP

While using Fulfillment by merchant means handling most of the work, Seller Fulfilled Prime is a combination of both FBA and FBM. Like Fulfillment by Amazon, you are allowed to use Amazon Prime badge on some of your products and have customers that are Amazon Prime members and handle, ship your items and do the customer service the FBM way. 

How much does Amazon Fulfillment By Merchant Costs?

The subscription per month is 39.99$. But if you are an individual seller, you won’t need to pay for the subscription, but with every unit you sell, you’ll have to pay Amazon 0.99$ fee. Therefore, if you are selling more than 40 items per month, it is best to pay for a Pro package. Amazon also will take referral fees from you. When you’re selling items in their online shop, it’s like they are the ones who are referring customers to you.

Using this fulfillment, you will have to consider a lot of things like the percentage of the referral fees (depending on which category your product belongs to), the packaging supplies, and the cost of the shipping fee. Don’t forget to include the actual manpower that made all this fulfillment feasible.

Monitoring your costs and comparing it to your monthly transactions and other fees that involve the whole fulfillment itself will help you determine if FBM suits your business well.

Which is better – Amazon FBM or Amazon FBA?

Both fulfillments have their perks. You just need to do more research, trial and errors to know which fulfillment works best for you. You can scroll back at the top and read the advantages and disadvantages of using FBM. 

If you have a growing business and the demand for your items is getting bigger, we suggest that you should try using FBA. It saves you more time that allows you to focus on re-stocking and exploring the internet for the new trending items that you can add to your Amazon listings in the future. But if your small business is selling handmade products, it is ideal to use fulfillment by a merchant since you won’t be needing a warehouse to store your items. And handmade items require the seller to have engagement with the clients about their preference and the deadline of when the item is going to be shipped to its destination.

Being in full control of your business provides you more knowledge on which are your target customers and what they demand from you. These are some of the contributing factors that will also help your online business flourish.

Conclusion

It might be quite a hassle using Amazon FBM. Still, it gives you more time to learn about how your business runs, and you will know firsthand when there are things that need improvement, especially the quality of your products and the right on-time delivery of your items to each of your customer’s doorsteps.

The fulfillment itself might be energy and time consuming, but as time goes by, and when your business becomes successful, it will be worth it.